The White House has ordered a review of how the Obama administration handled the Delphi Salaried Pension Plan in 2009, when Delphi spun off from General Motors Corp. during bankruptcy. The salaried employees pension plan was transferred to the Pension Benefit Guaranty Corp. as part of a bailout of the auto industry.
At the time, GM agreed to “top up” pension benefits to original levels for workers covered by three union agreements, which Treasury Department officials said at the time was a necessary step to help GM emerge from bankruptcy.
Salaried and other workers without union contracts got diminished pension benefits due to PBGC benefit caps.
One group of salaried plan participants sued unsuccessfully to challenge the PBGC’s takeover of the plan, which at the time of termination in 2009 had $2.5 billion in assets and $4.5 billion in liabilities, for a funding ratio of 56%, according to the PBGC website for the salaried plan.
In an executive order signed Thursday, President Donald Trump directed the secretaries of Labor, Commerce and Treasury to review whether the PBGC can restore the full pension benefits of 20,000 Delphi participants and review the decision to terminate the pension plan. The order gives 90 days for the review to see what actions can be taken to restore the full pension benefits.
“A group of salaried and non-unionized Delphi retirees who did not benefit from their unionized colleagues’ deal with General Motors have spent the last decade in legal and financial limbo as they challenged the termination of their pension plan in the federal courts. That litigation remains ongoing, and the Court of Appeals for the Sixth Circuit recently affirmed the District Court’s grant of summary judgment against the retirees,” the White House order said.
In a separate statement, Sen. Rob Portman, R-Ohio, applauded the executive action and said the retirees deserve to have their pension benefits restored. “Today’s news means they are one step closer to seeing their pension benefits reinstated, and I’m pleased the president took action to help them,” Mr. Portman said.
The White House order also calls for a review of all PBGC plans for possible actions, including legislation, to “maintain the future solvency” of the PBGC’s single-employer and multiemployer programs.
House Education and Labor Chairman Robert C. “Bobby” Scott, D-Va., criticized the order in a statement. “After nearly four years in office and less than two weeks before the election, the White House finally woke up to the reality that there’s a multiemployer pensions crisis. Unfortunately, instead of championing the responsible solution in the House-passed HEROES Act, the White House decided this issue deserves further study. That is simply unacceptable.”